Packaging
Doosan Corporation sells 100% of its stake in the Techpack business
Thursday 20. November 2008 - - Agrees on transaction valued at KRW 400 billion with MBK Partners - Focuses on core business, reduces debt, and accelerates the company efforts in transforming into a holding company
On November 13, 2008, Doosan Corporation has announced that it has executed an agreement with MBK Partners, the largest private equity fund managing company in Korea, to sell 100% of the companys stake in the Techpack business (henceforth “the Techpack”).
Doosan Corporation and MBK Partners agreed on the transaction value of Techpack at KRW 400 billion and further agreed to execute the deal before the year end. At the time of spin-off, Doosan Corporation will receive the proceed, minus the transferring debt of KRW 199.2 billion, which amounts to KRW 200.8 billion, in cash.
A Doosan official stated, “Its the result of MBK Partners recognition of stable cash flow of Techpack as well as the companys firm lead on the market share of Koreas packaging industry as well as high assessment of the companys technology and personnel.” “Through the recent sales, Doosan will generate approximately KRW 193 billion in sales profits and reduce the debt ratio to about 46 percent, which will eventually lead to a significant improvement in the corporate financial structure,” he added.
Doosan Corporation is planning to use the sales proceeds to reduce debts and as reserved capital for future business opportunities
Doosan Techpack, which had become the first domestic enterprise to enter into glass bottle manufacturing business in 1950s, have grown into comprehensive package manufacturer and have been producing glass bottles, cans, PET, and other drink and food packaging containers and today, holds the number 1 market share in the domestic packaging container industry. Based on spin-off public disclosure (Sep. 2, 2008), Techpack had assets valued at KRW 294.9 billion, debt of KRW 258.5 billion, and 2007 year revenue of KRW 288.9 billion.
Since the announcement on January of 2006 of its plans to transform into a holding company, Doosan Corporation has exerted continuous efforts such as liquidating its stake in the subsidiary companies to resolve cross funding issues, as well as sell-off and spin-off of various businesses to improve corporate financial structure.
The Techpack sell-off was advised by Hanna IB and Kim & Chang.
– Efforts to Transform Doosan Corporation into a Holding Company
– 06.11 Liquidation of Chongga Kimchi Business
– 06. 8~07.5 Termination of Subsidiary Cross-Funding Structure
– 07.12 Tower / Bio-Resource Business Physical Spin-Off
– 08.1 Transfer of Ownership of Magazine Business
– 08.6 Acquires New Growth Business: Doosan Motrol
– 08.10 Publishing Business Spin-Off
– 08.11 Techpack Business Sell-Off